Women entrepreneurs need the support of their very own tribe

Form clubs of fellow businesswomen for mutual aid and to serve as confidence boosters in male-heavy fields like finance

- SAUMYA SINDHWANI & SUDIPTA SHAW are, respectively, a professor and research associate at the Indian School of Business.

Globally, women are the ones who have been managing household finances. However, when it comes to business finances, women are significantly under-represented. Even so, studies also show that women outperform men in fund management and credit repayment, which would suggest financial acumen among them. Why is it, then, that when it comes to starting a business, women are not asking for money? In our study of 898 women entrepreneurs (WEs), we found that less than 40% of them seek financial support from banks. Our study also revealed that more than 60% of WEs face several challenges while seeking financial support from banks. This brings us back to the question: Are WEs not asking for money? Or are WEs not getting the money?

We found that WEs often do not ask for money because they are not confident of their financial knowledge. This is on account of their gendered socialization that imposes a self-limiting belief which hinders their willingness to take financial risks. Despite this, even when some women attempt to access credit, gender stereotypes held by loan officers, who are typically male, contribute to unequal distribution of credit between men and women. Data from World Bank affirms the same, with men receiving credit equivalent to 52% of their deposits, while women get only 27%.

To overcome these self-limiting beliefs, women need to cultivate self-efficacy—a sense of self-assurance in one's capacity to perform, cope and succeed under any adversity—in financial matters. Women at all levels and various stages have faced some challenge or the other while asking for money or in the process of getting it. To navigate these challenges, women need women supporters and cheerleaders who can encourage them in their journey of entrepreneurship.